Archives for February 19, 2018

Key Highlights

Ripple price is struggling to move higher and is currently trading below $1.0850 against the US dollar.

There is a major contracting triangle pattern forming with resistance at $1.0700 on the hourly chart of the XRP/USD pair (data source from SimpleFx).

The pair has to move above $1.0700 and the 100 hourly simple moving average to move further higher.

Ripple price is slowly moving away from the bullish zone against the US Dollar and Bitcoin. XRP/USD must break above $1.0700 and the 100 hourly SMA to avoid further declines.

Ripple Price Upside Hurdle

There was no upside break above $1.12 in Ripple price during the past three sessions against the US Dollar. The price started a slow and steady downside move and traded below $1.10. It also traded below the $1.0750 support and the 100 hourly simple moving average. The last upside move not sustainable above the 50% Fib retracement level of the last drop from the 1.1510 swing high to $1.0050 swing low.

There was no hourly close above the $1.10 level, which ignited a downside wave. At the moment, there is a major contracting triangle pattern forming with resistance at $1.0700 on the hourly chart of the XRP/USD pair. The pair is approaching a short-term break either above $1.0700 or below $1.0400. On the upside, above $1.0700, the price could test the 61.8% Fib retracement level of the last drop from the 1.1510 swing high to $1.0050 swing low at $1.0945. Above the mentioned $1.0945, the price may perhaps move above the $1.10 level.

On the flip side, if the pair fails to move above the 100 hourly SMA, it could decline back towards $1.0200 in the near term.

Looking at the technical indicators:

Hourly MACD – The MACD for XRP/USD is now moving in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for XRP/USD has moved below the 50 level.

Projects building on the Ethereum network have announced plans to pool resources and collaborate. Cosmos, OmiseGO, Golem, Maker, Global Brain, and Raiden will together launch the Ethereum Community Fund with the goal of coordinating and strengthening development on the Ethereum network. The fund’s first move will be an Infrastructure Grant program, providing permanent financial support for development tackling

Yesterday was President’s Day in America. Schools were shut, no government offices functioned and even the stock markets rested. While the banking system napped though over $7 billion in Bitcoin was traded.

Bitcoin Rebounds As Banks Take The Day Off

Unlike the stock and commodities markets, cryptocurrency trades 24/7. It recognizes no national holidays, doesn’t mind working on Sundays and stays up all night.

Since January 3, 2009 when Bitcoin went online it has been functionally trading 99.99 percent of the time. In that same time period, there have been 216 bank holidays in America (more in other countries) not including weekends, when trading in traditional markets stagnates.

Historically cryptocurrencies will spike on national holidays. It makes sense that like online commerce which always has an uptick when people are off work Bitcoin markets will see a bump when the majority of day traders are at home.

Yesterday was no different. Bitcoin trading was brisk over the weekend as the price rose back over $11,000, showing an 84% gain. Though it dropped back down to 10,800 on Monday as investors took some profits out more than $7 Billion traded over the day.

This rebound should ease some investors fears about a free falling market and shut down much of the FUD and doom and gloom from naysayers looking for a bubble to pop.

As Bitcoin fell from all-time highs starting in December and other cryptocurrencies followed suit there was much talk from government representatives and mainstream media about it being a false market in need of heavy regulation.

Analysts who specialize in following the movements of the crypto market though called it a correction that fell in line with crypto market history and said there would be a slow recovery through the spring and sharp gains starting around July.

Good News From Europe And Asia

Though some of the movement yesterday may be contributed to leisure time activity like shopping and online gambling the steady price rebound over the last two weeks may mark the return of a crypto bull market that analysts are looking to bring big gains back to the market in 2018.

The UK’s business insider reported that much of the weekend recovery was fueled by heavy trading in Japan as investors rush to get back in the game now that Bitcoin is gaining again.

There was also positive news from Europe as the Swiss Financial Market Supervisory Authority (FINMA) published guidelines last week to regulate ICO’s and one of the main banks in the Netherlands has announced that it will use Blockchain technology to replace escrow accounts. As the fiat banking systems rests the cryptomarket continues to trade, sometimes rising, sometimes falling but always working.

Key Points

Bitcoin cash price is trading above the $1,500 support and is preparing for the next move against the US Dollar.

There is a short-term contracting triangle forming with resistance at $1,540 on the hourly chart of BCH/USD (data feed from SimpleFX).

The pair is likely to break the triangle resistance at $1,540 and make the next move.

Bitcoin cash price is stable above the $1,500 support against the US Dollar. BCH/USD may continue to rise in the short term towards $1,600 and $1,650.

Bitcoin Cash Price Support

There was a slow and steady rise above the $1,450 level in bitcoin cash price against the US Dollar. The price moved above the $1,500 level and is currently trading comfortably above the stated level. Moreover, the price is above the $1,510 pivot level and the 100 hourly simple moving average. After the last decline to $1,381, the price recovered and moved above the 50% Fib retracement level of the last drop from the $1,615 swing high to $1,380 low.

However, there is a major resistance near the $1,540-1,550 levels. There is also a short-term contracting triangle forming with resistance at $1,540 on the hourly chart of BCH/USD. The pair may continue to trade in a range above $1,500 before it makes the next move. A successful close above the 61.8% Fib retracement level of the last drop from the $1,615 swing high to $1,380 low could open the doors for more gains. A break and close above the $1,550 level could clear the path for a push towards $1,600.

On the downside, the $1,500 level remains a major support. A break below it could ignite more losses towards $1,400.

Looking at the technical indicators:

Hourly MACD – The MACD for BCH/USD is slowly moving in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BCH/USD is currently above the 50 level with a flat structure.

Bitcoin price is still rallying and has broken one resistance level after another.

Zooming out to the daily time frame reveals that price is closing in on a major area of interest.

Applying the Fibonacci retracement tool on the daily swing high and low shows that this potential ceiling lines up with the 61.8% level as well.

Bitcoin price could pause from its climb once it tests the next area of interest visible on the daily chart.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on this long-term time frame, so the path of least resistance is to the upside. This suggests that the rally is more likely to continue than to reverse.

However, the 100 SMA dynamic inflection point lines up with the area of interest to add to its strength as a potential barrier. Then again, the gap between the moving averages is widening to reflect stronger bullish momentum.

Stochastic is indicating overbought conditions on this time frame, though, so selling pressure could return soon. In addition, a bit of bearish divergence can be seen as price made lower highs while stochastic had higher highs.

RSI has some room to climb before hitting overbought levels, which means that buyers can stay in the game for a bit longer, possibly even leading to a move past the area of interest.

Market Factors

Sentiment has significantly improved in the cryptocurrency industry, allowing bitcoin price to sustain its recent rallies. This is seen to have stemmed from the US Senate hearing encouraging developments in the industry, followed by positive remarks from South Korean officials over the previous weekend.

Other nations are expected to take a similar stance on bitcoin, although it’s also worth noting that BOE Governor Carney recently commented that it has failed as a store of value.

Dollar price action could pick up and lead to more volatility for BTCUSD as the Fed gears up to release the minutes of its latest policy meeting. Keep in mind that global tightening expectations have been influencing market sentiment and bitcoin price has drawn support from risk-taking.

Things are looking rather pleasant for crypto markets during this morning’s Asian trading session. Bitcoin has sustained solid growth of over 7% on the day and currently trades at just over $11,450, this has pulled the majority of the altcoins to higher levels. One way out in front of the pack at the moment is Ethereum Classic.

Coinmarketcap has ETC trading at 26.5% higher than this time yesterday. The price hike has sent the altcoin from $34 to $43.5 in 24 hours. It is way ahead of the next best performer in the top 25 which is VeChain. Looking at the weekly chart Ethereum Classic is up almost 50% on the $28 it was trading at this time last Tuesday. The recent spike in price happened a few hours ago when consolidation was broken on the upside and it jumped almost 10% in about an hour.

Ethereum Classic was the original version of Ethereum which was created after the DAO attack in June 2016. The core community and developers split along with the software division with founder Vitalik Buterin going with the new forked version which has now become the standard. There are 99.9 million ETC tokens circulating with a $4.3 billion market capacity putting it at 14th position in the charts.

Momentum as usual has come from South Korea this morning with Bithumb and Upbit taking the largest trade volume at just under 40% combined. Around $1.3 billion has been traded in the past 24 hours, largely in KRW.

Other altcoins enjoying double figure growth this morning are VeChain and OmiseGO. The few in the red include Cardano, Stellar, Nem and Lisk.

Economist Vit Jedlicka has created a virtual state, called Liberland, that runs on cryptocurrency donations and will launch its own token in the coming months. Half a million people have applied for citizenship to the “nation” – which sits on a sandbank stretching 7km next to the Danube River (between Croatia and Serbia), 10km south of the Hungarian border.

“The situation on the mainland in Liberland is still difficult as Croatian police illegally persecute all visitors and settlers,” Jedlicka told the Telegraph in an interview. “We are waiting for exoneration from the Croatian constitutional court but for now, our settlement has essentially moved to the river, where we host visitors almost on a daily basis.”

Liberland state-business is conducted over email, WhatsApp, and Skype, permitting the 100 like-minded Liberland representatives across the globe to stay in communication. The country is in the process of launching its own legal system on blockchain technology, and will begin distributing its own coin, Merit, on April 13th — which coincides with Liberland’s third anniversary. All those who pay taxes will, in turn, receive Merit, effectively granting donors a stake in the country.

“For many years, I worked for lowering taxes and regulations in the Czech Republic, but I suddenly realized that it would be easier to start a new country than to fix an existing one. We suffered 40 years of serious damage to our society under a communist regime and, unfortunately, many of the same people are in power again,” he says. “It seems that Czechs do not learn from their history. We see some of the same damage happening in other European countries, where taxation and regulation is strangling prosperity.”

The nation accepts Bitcoin, Bitcoin cash, and Ethereum donations to run its financial operations, and the state budget is distributed among almost a dozen cryptocurrencies. Putting yourself at the mercy of a potentially volatile asset might sound like a strange idea, but Jedlicka does not let this phase him: “For a few years of my life I worked as a financial markets analyst,” he says. “That gave me a fairly good understanding of the system we are living in.”

Liberland’s motto is “live and let live,” but right now it’s not that simple for Jedlicka, who jokes that his current home is “on a plane.” Jedlicka is constantly traveling the globe promoting his venture and meeting with representatives as well as other parties interested in creating similar libertarian-minded living spaces in Africa and Central America.

Croatian police are currently engaged in a game of cat and mouse with early Liberland “citizens,” who are regularly arrested and forcibly removed: Around 100 people have been arrested since the proclamation of Liberland in 2015. “We were charged with leaving Croatia and the Schengen zone illegally,” he says. But that’s not all bad, as, according to Jedlicka, “That is matter-of-fact confirmation that Liberland is not part of Croatia.”

Despite threats of some of the planet’s harshest punishments, police in Bangladesh are struggling to stamp out the use of cryptocurrency in accordance with their legislation. Several different groups have recently combined resources at the behest of the central bank. As yet, there has been little progress towards eradicating the use of digital currency.

Harsh Penalties for Cryptocurrency Trading are Nothing New

Bangladesh’s draconian attitudes towards the rapidly expanding cryptocurrency space are hardly a recent development. Back in September 2014, the government made it illegal to transact in any form of digital currency. The maximum penalty for doing so is an unfathomably strict 12 years of jail time.

Late last year, the inefficacy of the threat of such harsh sanctions was revealed. A notice from the Bangladeshi Central Bank entitled “Caution on Bitcoin Transaction: Warning against online transactions in Cryptocurrency (eg. Bitcoin, Litecoin)” proved that the rampant use of digital currency in the nation was still a concern for the central financial institution. The document stated:

“As these are not legal tenders issued by any legal authorities of the country, no one can make any financial claim against these.”

The notice went on to state that those trading in digital currencies may be violating the Money Laundering Prevention Act 2012. In addition, the Foreign Exchange Regulation Act of 1947 was cited, along with a general plea from the bank for people to “not make transactions in virtual currencies.”

The latter request, along with recent multilateral efforts from various government and non-government departments to track down cryptocurrency users highlight how difficult the issue is to police.

The Bangladesh Financial Intelligence Unit (BFIU) and Foreign Exchange Police Department are currently searching for cryptocurrency traders. They have also drafted in the assistance of the Bangladesh Telecommunication Regulatory Commission (BTRC).

“We have already located a few bitcoin users, and are on the hunt for more, along with a few web pages which are being checked for authenticity. Investigating cryptocurrency trading is a complex matter.”

Bangladeshis working in the freelance sector and those who frequently travel outside of the nation are amongst those most likely to trade digital currencies, or so the BFIU believe. They also suggest that some notable cricket players have become involved with the space.

Despite the recent step up in operations against those dealing in cryptocurrencies, several factors point to a general failure by the authorities to curb the perceived problem. LocalBitcoins Bangladesh still has active traders offering to buy and sell BTC and another peer-to-peer platform, Paxful, offers Bangladeshi citizens over 300 different payment options for trading the digital currency. Meanwhile, a Facebook page called “Bitcoin Exchange: Bitcoin Buy and Sell Bangladesh” has also been created.

Finally, it’s rare to see governments and central banks issuing pleas like the one of December 2017 for people to stop committing crimes that are easily policed. If it was a simple task for authorities to track down and prosecute those who flout the law, an example would have surely been made by one unfortunate victim of the draconian legislation by now.

Meanwhile, there are also calls for the Bangladeshi authorities to stop wasting their scant resources on such “crimes”. A reporter for the Dhaka Tribune argued that the nation was in no position to be unsuccessfully chasing Bitcoin users:

“… crime rates are through the roof, corruption is omnipresent within our government, and terrorists are getting bail with impunity, our police force would do well to focus its efforts elsewhere… A quick glance at the streets is enough to betray the lawlessness which has overtaken our roads: Laws continue to be broken with little to no consequences, and police are often too happy to look away.”